10 benefits of a life insurance (life insurance ke fayde) 

10 benefits of a life insurance

First Life Insurance

This campaign has been launched by Life Insurance Council to bring awareness related to life insurance in the country. All life insurance companies in India are participating in this. Anyway, very few people take life insurance in India.

If the head of the family dies untimely, it becomes difficult to run the household expenses. It is necessary to take a life insurance or life insurance policy to protect the wife/children/parents etc. of the main person of the family from financial crisis. In today's era, when every second person in cities lives in a house with a loan, then in such a situation its need increases even more.

In financial planning, first of all a person is suggested to buy a life insurance or life insurance policy.

Life insurance or life insurance is primarily a risk management tool that aims to provide financial protection to your dependents in the event of your death.

Today in this article we will know what is life insurance? (What is Life Insurance in Hindi?) How many types are it? (Types of Life Insurance) and how are they useful in life? And what are its benefits?

What is life insurance? 

Life insurance or life insurance is a contract between an insurance company and an insured person. According to this, if any kind of accident or accident happens to the insured person, in which his death or death occurs, then the insurance company will be his beneficiary or nominee. Nominee) (family member) pays a certain amount to the individual.

For this, the insured has to pay a small amount regularly as a premium for a limited period of time. This life insurance or life insurance policy acts as a financial protection cover for the family or loved ones. To understand life insurance or life insurance plan, it is very important to know the terms used in it.

Here it is :- 

1. Life Insured – Life Insured The person whose life is secured is called Life Insured. On the death of Life Insured, the beneficiary gets the sum insured. For example:- A husband takes life insurance or life insurance for his wife, then he is the insurance holder or policy holder and his wife is Life Insured.

2. Insurance Holder – Insurance Holder The person who buys insurance and pays the premium is called an insurance holder or a policy holder. A person can be the owner of the policy but his life is not necessarily insured. 3. 

3. Nominee – Nominee The person nominated by the policy holder is called a nominee.

In case of any untoward incident, only the nominee gets the pay-out of life insurance or life insurance. Nominee is also called Beneficiary or Beneficiary. Nominee is made at the time of buying the policy. In most of the cases, the family members of the policyholder, who are financially dependent on him such as: - His spouse, their children or their parents are made nominees.

4. Premium – Premium The premium paid for the continuance of a life insurance or life insurance plan is called premium. If you fail to pay the premium on the due date or do not pay the premium even after the grace period, your policy will terminate.

5. Policy Tenure – Policy Tenure The period for which life insurance or life insurance provides coverage is also called policy term or policy term or policy tenure. The policy tenure is based on the type of life insurance or life insurance and the terms and conditions of the insurance company.


6. Sum Assured – Insurance Money – Sum Assured This is the amount that the beneficiary or beneficiary or nominee gets after the death of the insured person. Most of the time the Sum Assured is selected keeping in mind the financial loss on the death of the insured person.

While buying a life insurance or life insurance plan, the policy holder chooses the Sum Assured which will give the nominee the death in the policy term of the insured person. ) is obtained.

7. Death Benefit - Death Benefit The payment received to the beneficiary or the beneficiary on the death of the policyholder during the policy term is called death benefit. Sum assured and death benefit are different. The death benefit can be equal to or more than the sum assured as it also includes rider benefit.

8. Maturity Benefit The amount that is paid to the policy holder after the end of the policy tenure is called Maturity Benefit. 

9. Lapsed Policy In life insurance or life insurance, if the premium is not paid even after the grace period is over, then that policy terminates and it is called a lapsed policy.

10. Grace Period
The additional time given by the insurance company beyond the due date of the premium is called the grace period . The cover of the plan continues after the premium has been paid by the policy holder .

11. Revival Period – Revival Period
In life insurance or life insurance , if the premium is not paid during the grace period , then the policy lapses . There is an opportunity to start the plan or policy again only for a certain time, this is called the revival period .

12. Free Look Period – Free Look Period
If you are not satisfied with the terms and conditions of the policy, the policy can be returned within a stipulated time as per the policy documents . This is called the Free Look Period .

13. Claim Process – Claim Process – Claim Process
In life insurance or life insurance, if the insured person dies during the policy tenure, then the nominee fills the claim to get the death benefit . This is called the claim process or claim process .

14. Exclusion – Exclusion
There are many situations in a life insurance or life insurance plan which are not covered by the insurance .

15. Capital Protection – Capital Protection
In a life insurance or life insurance policy, the sum assured remains as long as the premiums are paid regularly or as long as the policy remains inforce .

16. Inflation Protection – Inflation Protection – Inflation Protection
Life insurance or life insurance does not provide inflation protection as insurance or insurance is a fixed cover and fixed tenure product.

17. Guarantee
In a life insurance or life insurance policy, only the sum assured is guaranteed . Some policies may guarantee minimum returns.

18. Loan -Loan
In life insurance or life insurance policies, endowment and profit plans can be pledged to avail a loan.

19. Liquidity – Liquidity
The liquidity of life insurance or life insurance policies depends on the type of policies.

20. Tax Implications – Tax Implications
The premium paid in a life insurance or life insurance policy is tax exempt under section 80C to the extent of Rs 1.50 lakh in a financial year. 

Similarly, maturity or claim amount is exempted under section 10(10)D of income tax.

21. Investment Objective & Risks – Investment Objective & Risks – Investment Objective & Risks
The sole purpose of life insurance or life insurance is protection . Some life insurance policies also offer investment .

What is Life Insurance or Life Insurance suitable for? - Life Insurance is Suitable for.

Life insurance or life insurance is suitable for those people who have financial dependents .

For whom is life insurance or life insurance not suitable? – Life Insurance is not suitable for.
Life insurance or life insurance is not suitable for those who do not have financial dependents and have sufficient accumulated wealth to meet future financial needs .

What is Life Insurance or Alternative to Life Insurance? - What is Alternative of Life Insurance?
There is no alternative to life insurance .

Why Buy Life Insurance or Life Insurance Policy? - Why Life Insurance Policy Should Buy?
Life-Insurance
Life insurance policy is a very important thing in the form of financial cover for situations like disability , death , accident , retirement .

There are many risks in our life and when a person suffers any loss due to accident or natural reasons or he gets partial or complete permanent disability then his regular income gets affected a lot. If that person is the sole breadwinner, then the family makes a big difference.

So buying a life insurance policy will ensure that your family will be able to live comfortably after you.

Therefore it is necessary to buy life insurance or life insurance because:

In the event of the death of the policy holder , life insurance or life insurance provides financial support to the family.
Life insurance or life insurance covers the financial and educational needs of the children in the absence of the insured.
With this, a regular income keeps coming even after retirement.
If the income decreases due to a critical illness or accident, then life insurance or life insurance keeps on getting additional income.
Life insurance or life insurance also covers financial emergencies and lifestyle needs.
Hence life insurance plan is very important for those who are the support of their family and are the sole breadwinner in their family.

What are the benefits of life insurance or life insurance policies? – What is the Benefit of Life Insurance Police?
There are many benefits that life insurance policies offer to policyholders. Let's take a look at the most important benefits:

Financial Assistance – Financial Help – Death Benefit :-

An individual needs insurance to cover his expenses, pay off the loan , maintain the income and for the education of the children.

Death or death is a fact, it is known to all, but what happens when a person dies ? 

His family has to face a lot of difficulties in his absence. In such times life insurance or life insurance works as an assistant and contributes to meet their needs.

Accident Cover – Accident Cover :-

Any person can face an accident in which something bad can happen to him. The cost of self-healing after an accident is huge. But luckily a life insurance or life insurance policy is able to do this.

Assured Income – Ensure Income :-

There are some retirement plans that prove beneficial in saving money. You keep saving money within a certain period of time, which later you get back as a regular income . It works as a fixed income at the time of retirement.

Loan Facility – Loan Facility :-

People taking advantage of life insurance or life insurance also have the option of availing loan or loan through their insurance policy . Which can help them meet their life necessities without diluting the assured benefits on the policy purchased by them.

Tax Benefit – Tax Benefit :-

On paying the premium of a life insurance or life insurance policy, the policy holder gets the benefit of tax exemption under section 80C of the Income Tax Act, 1961 . This benefit is also available on paying the premium of your spouse , children or your dependents .

This benefit is given by all life insurance or life insurance companies , whether it is public or private .

Apart from this, the maturity benefit of the policy is also tax free under section 10(10)D of the Income Tax Act 1961 .

Thus life insurance offers attractive tax benefits and helps in building a huge amount of wealth.

What are the types of Life Insurance or Life Insurance Policy? - How Many Types of Life Insurance Policy?

Life insurance or life insurance policies are as follows:-

Term Insurance Plan – Term Insurance Plan
This life insurance or life insurance policy comes under the protection category as it only provides financial protection.

Basically, it covers the risk of death. This is a cheap plan which can be easily purchased.

In this plan, after the death of the insured, the sum assured is paid to the beneficiary or the nominee mentioned in the policy bond .

Whole Life Insurance Plan – Whole Life Insurance Plan
Whole life insurance policy provides protection for the whole life .

In such plans, generally the insured is given an option to pay the premium amount for a specified period of time . Which is also known as maturity period .

If the insured or insured person reaches maturity , he is paid the sum insured and bonus and thereafter life cover till death or death or till the age of 100 years without paying the premium . Life Cover).

Endowment Policy

Endowment plans arecalled traditional life insurance or life insurance plans. It pays the sum insured along with both the investment or death benefits

In this the risk is less as compared to investment or investment , hence its return is also low.

Child Insurance Policy – ​​Child Insurance Policy
These plans provide financial coverage for the future needs of the child . In a child plan , you can add money for your child's education and marriage .

In most of the plans, the benefits are available either annually or all at once when the child turns 18.

Premium is paid by the insurance holder in case of any untoward incident or in case of death or death during the policy tenure of the policy holder .

In such a situation, many insurance or insurance companies give a discount on the premium coming and the plan continues till the policy tenure.

Basically, a child insurance policy ensures that the future financial needs of the child are taken care of even in your absence .

Pension Plan or Retirement Plan – Pension Plan or Retirement Plan

A retirement plan, also called an annuity plan or pension plan, is taken by a person to secure his post-retirement life and to accumulate money.

A pension plan is basically an investment or savings tool that meets future retirement needs.

Investment Plan – Investment Plan
This life insurance or life insurance policy helps in saving and getting insurance protection .

Unit Linked Insurance Plan (ULIP) – Unit Linked Insurance Plan (ULIP)
ULIP is basically a financial tool , whichalong with providing insurance or insurance cover, is also helpful in wealth creation.

Those who have good knowledge about share market can understand it easily. In this , there is an opportunity for life -time investment and valuable investment .

A part of the premium paid for a ULIP is used as a risk cover for a life coverage plan and the outstanding amount is credited to Debt , Equity , Bond ), market funds , hybrid funds etc. are invested or invested . 

Unit-Linked Insurance Plans (ULIPs) give you the absolute right to choose the best way to invest or invest the money. On this basis, the insurance or insurance company invests or invests in the capital market .

Money Back Plan – Money Back Plan
According to its name, it gets some money back along with life coverage . This policyholder gets this at a pre-determined time. 

This benefit is also called Survival Benefit . In this , the full insurance amount is paid in case of death or death .

Money back policy is best for those who want to invest with liquidity . Along with this , bonus is also givenby the insurance or insurance company in these plans.

What is Rider in Life Insurance or Life Insurance? - What is Rider in Life Insurance?
Rider in life insurance or life insurance is an additional benefit attached to the policy . It is usually equal to Basic Sum Assured and has different terms and conditions .  

Simply put, riders allow to increase the insurance or insurance cover both qualitatively and quantitatively .

The main rider is :-

Critical Illness – Critical Illness – Critical Illness :-
A Critical Illness Rider added to a life insurance or life insurance policy provides an additional cover to the insured or insured that is paid on diagnosis of a critical illness.

The main serious diseases covered in the Critical Illness Rider include: - Cancer , Coronary Artery Bypass, Kidney or Renal Failure, Major Organ Transplant (Major Organ Transplant), Paralytic Stroke etc.

Hospital Cash Rider – Hospital Cash Rider :-
The benefit of this rider is given by insurance or insurance companies to policyholders who want to cover emergency hospitalization expenses. Under this a certain amount is paid.

Surgical Rider - Surgical Rider :-
It is a beneficial rider that assists the insured or insured by providing financial coverage for 43 types of medical treatment surgeries .

Permanent Total Disability or Accidental Death Rider – Paramanent Total Disability or Accidental Death Rider :-
With the help of this rider , additional sum assured is assured to the policyholder in case of permanent total disability or in case of accidental death .

Premium Waiver Rider – Premium Waiver Rider :-
The benefit of this rider is available when the policyholder becomes financially non- productive and unable to earn due to an accident or critical illness .

In this rider, the insurance or insurance company takes full responsibility of paying the premium till the time of maturity and on maturity the insured amount is paid to the insurance holder.

Level Term Rider – Level Term Rider :-
The term rider pays a fixed or monthly income to the beneficiary in the event of death or death of the policyholder .

This rider is useful when you have additional responsibilities or financial liabilities .

Guaranteed Insurability Option – Guaranteed Insurability Option
This rider entitles you to buy additional insurance or insurance in future without any medical examinationexamination. 


What is Life Insurance or Life Insurance Premium? - What is Life Insurance Premium?
Life insurance or life insurance premium is the payment that has to be made to get insurance or insurance benefits. 

Life insurance premium is paid annually though it can be paid half yearly and monthly as well. 

The insurance or insurance company decides the premium to be paid by the policy holder . To choose the sum assured, the insurance company takes into account your lifestyle , work or profession, your dependents , finances , insured value.

Where to buy life insurance or life insurance policy? – Where to Buy Life Insurance Policy?
Life insurance or life insurance can be purchased from various sales points, such as:-

by life insurance or life insurance agent,
by bank,
by corporate agent,
by a broker representing several insurance companies,
directly from the insurance company website, online,
by telemarketing,
by retail stores and malls,
Policies provided with banking products
by NGOs or self-help groups for rural areas, and
Internet sales through third party websites.
How to Buy Life Insurance or Life Insurance Policy Online?-How to Buy Life Insurance Policy Online?
Buying insurance or insurance online is very beneficial as their cost is cheaper as compared to other sales channels. For this, direct insurance or insurance can be purchased from the website of the insurance company. In this, the help of third party insurance broker portal can also be taken.

However, in some cases, the entire process is not done online, requiring physical intervention due to various types of obligations such as signature on the form and health check-up

Documents required for Life Insurance or Life Insurance Policy – ​​Documents required for Life Insurance Policy
Life-insurance
If you have decided to buy a life insurance or a life insurance policy, then certain documents are required. such as :-

Age Proof – Age Proof :-
The following documents are used as age proof :

driving license,
10th or 12th mark sheet,
birth certificate,
Passport,
pan card,
Aadhar card etc.
Address Proof
The following documents are used as address proof :

electricity bill,
telephone bill,
Ration card,
driving license,
Passport,
Aadhar card and
Voter ID, etc.
Identity Proof
The following documents are used as identity proofs :

pan card,
Passport,
driving license,
voter id,
Aadhar card etc.
Income Proof
Income proof is required by the insurance company to determine the high insurance cover . 

it is :-

3 to 6 months salary slips
Income tax returns 2 to 3 years old
Bank statement of last 6 months
business ownership proof
Latest Form 16
How to Manage Life Insurance or Life Insurance Policy?-How to Manage Life Insurance Policy?
Premium in a life insurance or life insurance policy can be paid in cash or by check or electronically.

An insurance or policy certificate is issued with the details of the name , premium , policy tenure and terms and conditions .

How to choose the best Life Insurance or Life Insurance Policy? - How to Choose the Best Life Insurance Policy?
Choosing an insurance plan with a good coverage and premium can be a very difficult task.
One can choose a good life insurance policy in the following ways:

Reputation of the insurance company :- Choose a life insurance company from the insurance companies available in the market which is old and has earned its name in the market and which meets your needs.
Claim Settlement Ratios :- The insurance company which has the best claim settlement ratio is the best choice.

Sum Assured Estimation :- To choose the best company, take your decision by adding up your Sum Assured and Premium both.

Customer Review : - Before taking a life insurance policy , you must read the online customer review . Reading this review helps in decision making. This also shows about the relationship with the customer of the company.

Which is the best Life Insurance or Life Insurance Plan? - Which is the Best Life Insurance Plan?

A good life insurance or life insurance plan means that in case of an emergency, your family members can live their life easily. To take a life insurance policy , one should choose carefully after looking at the benefits given in the policy.

Comprehensive Plan : It not only provides financial support but also provides a long-term investment option.

Guaranteed Annuity : An insurance plan gives you the opportunity to save for retirement as well.
Insurance with Saving: Premium has to be paid from time to time on taking life insurance or life insurance. This inculcates the habit of saving the policyholder. This collects an amount which can be useful when needed.

Provision for Loan: 

You can also take a loan on life insurance plan, so that your expenses will also be met and there will be no loss to the benefits of the plan.

Tax Benefit : Life insurance plans also provide tax exemption, which leads to savings. Tax exemption is available in all life insurance plans.
How to Claim for Life Insurance or Life Insurance Policy? -How to Claim for Life Insurance Policy?
In case of death or death of the policyholder, the nominee or beneficiary can claim in the following way:

Notify the insurance company as soon as possible with important details like time, place and cause of death or death .

Submit the required documents and certificates to the insurance company. This includes the claim form to be given by the insurance company and the death certificate of the insured person .

If necessary, post mortem , hospital and doctor 's report also needs to be submitted.
Once the investigation is complete, the insurance company can approve/disapprove the claim.
Best Life Insurance or Life Insurance Companies -Top & Best Life Insurance Companies
It is the following:-

LIC Insurance Corporation Of India
ICICI Prudential Life Insurance
SBI Life Insurance
HDFC Standard Life Insurance
Max Life Insurance
Reliance Nippon Life Insurance
TATA AIA Life Insurance
PNB MetLife India Insurance
Bharti AXA life insurance company
Aditya Birla sun life

summary

Insurance or insurance is an effective weapon to deal with the possibility of loss in future. We don't know what will happen tomorrow…? That's why we try to cover the possible loss in future through life insurance or life insurance policy.

Hope you got to know a lot about life insurance through this article.

People Also Ask :-

What is the meaning of Life Insurance? - What is Life Insurance ?
It is a type of contract between the life insurance holder and the life insurance provider.

Why Life Insurance is Important? - Why Life Insurance is Important?
Started life insurance at the right time helps in financial problems of your children, family members, children's education, college, other education and housing payments.

Is there any tax benefit from Life Insurance? - Is there any tax benefit from Life Insurance?
One can avail tax deduction of up to 1.5 lakhs under section 80C of the Income Tax Act 1961 for life insurance premiums!

What is a Life Insurance Policy?

Endowment plan is a traditional life insurance policy which is a combination of insurance and savings.

What is the process to get a life insurance policy? – What is the process of Life Insurance Policy?
A life insurance plan is a contract between the insured person and the insurance company, in which the insurance company pays a certain amount to the beneficiary in the event of any untoward incident or death of the insured person during the term of the insurance plan. In return, the policyholder promises to pay a fixed amount as premium.

How many types of insurance are there? - How Many Types are Insurance?

Types of Insurance :-

1. Life Insurance
2. Auto Insurance
3. Health Insurance
4. Travel Insurance
5. Home Insurance

What is a life insurance contract?
Life insurance is a kind of written promise made between the insured person and the insurance provider.

How much policy can a person take?
If the person's income is less than Rs 10 lakh per annum, then that person can get insurance up to 15 times his annual income. On the other hand, if the person's income is more than Rs 10 lakh per annum, then that person can get insurance up to 20 times.

What is the importance of Life Insurance or Life Insurance? - What is the Important of Life Insurance?
Life insurance gives peace of mind so that even after death, the family will not have to face a financial downturn.

What is the meaning of insurance or insurance?
Insurance or insurance is an effective weapon to deal with the possibility of loss in future.

Why buy a life insurance policy?
Life insurance or life insurance policy helps the family of the policyholder, in any difficult time.

When should I buy a life insurance policy?

Any moment when you feel that your family or loved ones are dependent on you for their needs, without wasting time buy a life insurance or life insurance policy.


How much life insurance or life insurance do I need?
When you are young, the needs are limited but as you grow older, you have more responsibility and more people join you. So, you should choose the best option keeping in mind your future needs. .

Can old people buy life insurance or life insurance?
Sure, those who are above the age of 60 can also buy life insurance.


What is the maximum age for getting life insurance or life insurance?
The age limit for getting life insurance is fixed by the company so there is no one age. Generally this age limit is between 75 to 80 years.

What is the average payout of Life Insurance or Life Insurance?
Average payout is based on premium, terms, condition, age, gender and job.

What are the different types of life insurance or life insurance?

The most popular life insurance policies in India are as follows:-

1. Term Life Insurance,
2. Endowment Plan,
3. Unit Linked Insurance Plan,
4. Money Back Policy,
5. Child Insurance Plan, and
6. Annuity Plan.

Do I need life insurance or both life insurance and critical illness cover?
It depends on your insurance needs.

Who can claim life insurance or life insurance after death or death?
After the death or death of the policyholder, his/her nominee or legal beneficiary can claim life insurance

10 reasons you need to buy life insurance

Young people think life insurance is something you need to think about when you get old. But that is a big myth

Life insurance is a bit of extra money that is invested and it accrues cash value.


Life insurance is a bit of extra money that is invested and it accrues cash value.



Buying life insurance is one of the most important financial decisions, but believe it or not, only 10 per cent of Indians are insured. But why is it so important? Well, regardless of how much you earn, no one knows what the future holds. Lots of people die a prematurely every year from illness or accident and, if you happen to be the sole breadwinner in the family and you were to pass away, it could have devastating consequences for your loved ones-their ability to pay household expenses, debts and maintain their standard of living.


The least you can do, therefore, is to secure your family's financial future by buying a life insurance policy. Besides, do not overlook benefits of a life insurance during your lifetime, especially if you are young. We list 10 compelling reasons for buying a life insurance policy.


1. LOOKING AFTER YOUR LOVED ONES EVEN AFTER YOU'RE GONE: This is the most important aspect of life insurance that one needs to factor in. Your family is dependent on you even after you're gone and you certainly don't want to let them down. Whether it's for replacing lost income, paying for your child's education or making sure your spouse get the much-needed financial security, life insurance could save the day for your surviving dependents.


2. DEALING WITH DEBT: You don't want your family to deal with financial liabilities during a crisis. Any outstanding debt-a home loan, auto loan, personal loan, or a loan on credit cards-will be taken care of if you happen to buy the right life insurance policy.


3. HELPS ACHIEVE LONG-TERM GOALS: Since it is an instrument that keeps you invested for the long term, it would help you achieve your long-term goals such as buying a home or planning your retirement. It also provides you with diverse investment options that come along with different types of policies.


Some policies are tied to certain investment products that pay dividends based on their performance. If you are opting for an investment-linked policy, be sure to read the fine print to be fully aware of the potential risks and returns.


4. LIFE INSURANCE SUPPLEMENTS YOUR RETIREMENT GOALS: Who wouldn't like their retirement savings to last until they do? With a life insurance plan, you can ensure you have a regular stream of income every month. Putting money in an annuity is like a pension plan- put in some money regularly in a life insurance product and enjoy a steady income every month even after retirement.


5. BUYING INSURANCE IS CHEAPER WHEN YOU'RE YOUNGER: Not every millennial needs a life insurance policy. If you haven't created an emergency fund or you're still living off your parents' money, insurance shouldn't be a priority.


However, if you do have dependents or you have co-signed a loan with your parents (or any other member of your family or friend), whether it be a student loan or a home loan, you need to start considering buying a life insurance policy. Besides, coverage costs are much lower when you're single. Insurance agents may try to sell you a policy that you might not need.


Therefore, do your due diligence or approach a financial planner to determine how much insurance you need considering the other assets you may own. Even if you're single, there may be other dependents and you need to ensure they're taken care of. Pradeep Pandey, chief marketing officer, Future Generali Life Insurance, says, "The earlier the better. For instance, single people provide financial support for ageing parents or a sibling with special needs. Insurability is another reason to consider life insurance when you're single. If you're young, healthy and have a good family health history, your insurability is at its peak, and you can get the best rates on your life insurance policy."


6. YOUR BUSINESS IS ALSO TAKEN CARE OF: Life insurance isn't only for yourself and your family. Some insurance policies also take care of your business. If you own a business, then your business partner can purchase your portion of the business without hassle. Your business partner( s) will enter a buy-sell agreement and the payout would go to the deceased partner's nominees, but without giving them a stake in the company. There are two types of life insurance policies-a term insurance policy and a life insurance policy.


While we are all aware of the death benefits these insurance policies provide, we know little about the various options they lay out that could help strengthen your financial position.


A term insurance provides protection for a specified period of time (10, 20 or 30 years) and pays out the benefits only if you die during the term. The policy will expire and coverage will end if you outlive your policy. An investment-cum-protection plan on the other hand offers you a lump sum amount on the completion of the term of the policy. These plans also offer you protection but the cover is usually not as high as offered with term plans.


7. TAX-SAVING PURPOSES: You could save taxes with insurance policies irrespective of what plan you buy. The premium you pay on an insurance policy is eligible for a maximum tax benefit of Rs 1.5 lakh under Section 80C, and for tax-free proceeds on death/maturity under Section 10 (D) of the Income Tax Act, 1961.


8. A TOOL FOR FORCED SAVINGS: If you choose a traditional or unit-liked policy, you pay a premium each month, which is higher than what it costs to insure you. This bit of extra money is invested and it accrues cash value. This cash can then be borrowed against the policy or you can choose to sell it or draw income from it.


9. YOU MAY NOT BE QUALIFIED FOR IT LATER: Life insurance policies run on uncertainties. You may be healthy now and paying a premium for life insurance may seem to be an added financial burden, but if you suddenly fall ill, you may not be allowed to but a life insurance policy. Therefore, it is imperative to buy one early on in your life because it remains in force if your health deteriorates later on. Insurance companies allow you to attach certain riders or benefits to your existing or new policy.


These riders enhance the quality of your insurance. The accelerated death benefit rider, for instance, allows the policy owner to avail all or a part of the policy's death benefit if he or she has less time to live due to a critical illness, or wants to use the money for medical treatment or related expenses.


10. PEACE OF MIND: Death is unavoidable. In the face of tragedy, the least you can do for your family is to secure their financial future. Even if it is a small policy, you know that you've done all you can to help them tide over difficult times.


Pandey says, "Life insurance is a great tool for both protection as well as helping a consumer save in a disciplined manner, which leads to creation of a good corpus. The need for life insurance changes at different stages of your lifecycle depending on the financial obligations and dependencies."

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